Negotiations to form new Dutch government to resume 100 days after vote

THE HAGUE (Reuters) - Negotiations to form a new Dutch government, which have already lasted 100 days, will resume between four parties seeking to forge a coalition with a parliamentary majority, the caretaker prime minister, Mark Rutte, said on Friday.

Rutte told reporters his liberal VVD party will return to the negotiating table next week with the centrist Democrats 66, Christian Democratic CDA and the conservative Christian Union.

Previous discussions between the same parties broke down after only hours due to a disagreement between CU and D66 over plans by the latter to expand the euthanasia law.

Rutte said on Friday he was confident that this attempt, the third in as many months, will ultimately lead to a deal.

"Together we have concluded that we are looking forward to these talks," he said.

Immigration was the leading theme in the March 15 vote and scuppered the first coalition talks with the Green Left party. Earlier discussions between D66 and CU last month fell apart when CU leader Gert-Jan Segers said "a miracle" would be needed to iron out differences with D66.

Before the elections, Segers labeled D66's proposal to broaden euthanasia from the terminally ill to people who feel their lives have been "fulfilled" as a breaking point. D66 leader Alexander Pechtold had called a coalition with the CU "undesirable".

The tiny CU holds only five out of 150 seats in parliament, but can make tough demands as kingmaker in the cabinet formation, since it is the last viable candidate to form a majority government with Rutte’s center-right VVD, after the far right party of Geert Wilders was ruled out by all major parties.

The formation process has already past the post-war average of 88 days, and will become the longest since 1977 if talks stretch another month, which looks likely, assuming that D66 and CU will still need some time to find common ground.

The long wait for leadership has not gone unnoticed on the financial markets. Dutch government bonds, which boast among the top credit ratings in the world, have come under slight pressure recently, narrowing the spread between Dutch and lower-rated Belgian loans.

Ultimately, a political compromise, rather than undesirable and snap elections, appears all but certain, political historian and cabinet formation expert Carla van Baalen said.

Another possibility, she said, is a minority government, but that would mean having to seek partners to usher difficult legislation through the two houses of parliament.

New elections are on "nobody’s mind," Van Baalen said. "We have seen gridlock before, long formations are part of Dutch culture. Although nobody is ever satisfied with the process, at some point a new cabinet always arrives."